38211 N Sombrero Rd

Carefree, AZ 85377

$2,350,000C+

4 bd · 6.0 ba · 5,334 sqft · Built 2005 · SingleFamily · Active · 36 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $20,000/mo
• Mortgage (P&I): −$12,324
• Tax + insurance: −$1,417
• HOA: −$0
• Vac / Maint / Mgmt: −$4,200
• Net cashflow: $2,060/mo
• Annual: $24,715/yr
• Cap rate: 7.34%
• Cash-on-cash: 3.76%
• DSCR: 1.17
• 1% rule: 0.85%
• Cash to close: $658,000

Investor read

• This is a 4-bed/6.0-bath single-family listed at $2.35M.
• At list price, monthly cash flow is $2k ($25k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $2.00M (14.9% below list).
• It's been on market 36 days — a 3% lower offer ($2.28M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.00M (14.9% below list) — sets the bar for 1% rule.
• In year one you build about $160k of equity ($16k loan paydown + $144k appreciation (6.1% local appreciation)).
• Location reads 68/100 on livability (#58 in AZ) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+; Watch: amenities D+, health & safety D+, commute F.
• Cave Creek Unified District (4244) (urban): math 57% / reading 59% proficiency, ranked #13 of 249 in AZ (top 5%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 8% free/reduced lunch — higher-income household profile.
• Zoned schools: Black Mountain Elementary School (math 66% / reading 63%, grade B, #104 of 1,109 statewide, top 10%, 495 students, 8% FRL); Sonoran Trails Middle School (math 48% / reading 50%, grade C-, #31 of 218 statewide, top 14%, 761 students, 7% FRL); Cactus Shadows High School (math 49% / reading 46%, grade D, #48 of 381 statewide, top 13%, 1,588 students, 6% FRL) — zoned schools at 7% FRL track the district average.
• Market conditions: 101 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 36,011 units permitted in Maricopa County in 2024 (12,801 in 5+ unit buildings).
• Maricopa County population projected at +38% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 21y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $225k; list at $2.35M implies a 944% gain — meaningful room to come down on a strong offer.
• At projected returns (6.1% appreciation + 3.0% rent growth), your $658k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$257k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.3% vs local median 4.0% in Carefree — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

Questions for listing agent

• It's been on market 36 days. Have you received any prior offers? Is the seller open to a 15% concession, seller financing, or rate buy-down credit?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.